Scott Swanson
City Council members made it clear Tuesday night, June 26, that they believe a 16 percent garbage rate increase proposed by Sweet Home Sanitation to cover its increased recycling costs is excessive and questioned why it took so long for the matter to come to the council.
Sanitation company officials responded that the proposed increase is simply what their costs are now that China has stopped accepting co-mingled recycling materials that are produced in Sweet Home.
“This is not our fault,” Scott Gagner, Sweet Home Sanitation manager, told the council in what was a fairly cordial conversation on the matter. “This is a global market issue.”
Conversation ranged over a variety of topics, including the sanitation company’s timing in responding to increasing recycling costs, the need for educating customers, a comparison of rates proposed for Sweet Home versus what is being charged in other communities, why rates are higher in smaller communities and what the options are for disposing of recycling.
Gagner has asked the council for an 11.76 percent increase to continue the current level of recycling offered by the company – in addition to an automatic 4.20 percent annual rate increase that is based on the most recent Portland Consumer Price Index.
The other option is to deposit all current recycling in landfills, which would require a price increase of 5.23 percent on top of the 4.20 percent CPI increase.
The discussion was a continuation from the council’s June 12 meeting, in which Gagner outlined the “China-induced market crisis” that has become a problem for solid waste disposal companies throughout the nation.
The Chinese government’s crackdown on contaminated recycling materials – plastics and “household garbage that has never been allowed” in commingled recycling – instituted Jan. 1, has resulted in an “overwhelming burden” for local companies, Gagner said in a letter to the city in May.
He noted that in May a Portland-area recycler paid Sweet Home Sanitation $30 a ton for material it now charges $84 a ton to accept.
“When transportation and handling costs are factored in, the cost per ton rose from an average of $26.04/ton in 2017 to a current cost of $118.47 a ton, an increase of 355%.”
Discussion on June 26 was at times spirited as councilors chastised Gagner and Brian White, a district manager for the Sweet Home Sanitation’s parent company, for failing to address the issue earlier and for the lack of communication from the company regarding what recycling is acceptable and what is not.
“You need to let the public know what they need to do,” Councilor Bob Briana said.
“You told us that when this really came to light was Jan. 1 or whatever,” added Councilor Dave Trask. “But you haven’t done anything to make people aware of what needs to be done to clean up this stuff. Now you’re coming to us and saying you need a bigger increase because you screwed up – and that’s exactly what it was. Now you’re asking for an 11 percent increase and that’s just wrong.”
He likened the situation to the city’s delay in raising water rates, which resulted in a spike in costs to customers.
White and Gagner reiterated throughout the discussion that their request was simply based on the costs the company has experienced and that they waited to see what would happen with what was a volatile market situation.
“This wasn’t laziness,” Gagner told councilors. “This was an unknown. A lot of people had hunches, but nobody knew what was going to happen with this market until it happened.”
He said they waited until they had an indication how Oregon Recyclers Association and Pioneer would respond, which wasn’t always clear.
White said company officials held off on taking action, hoping the situation would return to normal earlier this year.
“On Jan. 1 we were telling ourselves that,” he said. “Here we are in July.”
“Right now, because we are not processors for (commingled recycling), we take it up to Pioneer in Portland and dump it in a big pile. The point is, we can’t control (costs) because it’s run by a different industry. That’s one of the problems of recycling: We have no control over this.”
The market has changed drastically, he pointed out.
“A year and a half ago, nobody really cared if this material was dirty,” he said. “It wasn’t an issue. We could take it anywhere. Now, because the contamination threshold is half a percent, every little thing is an issue.
“This has been a learning process for all of us. Could we have done more education? Certainly. The industry as a whole, it was never an issue. We relied heavily on this gold mine, these back hauls to China. We put it in a truck and ran it up the road. In some cases they paid us for it.”
White told the council that recycling, “unfortunately,” is no longer a fixed cost.
Councilors expressed concerns over a chart provided by Gagner that compared Sweet Home’s proposed rate adjustment to others around the state. Of the 19 communities on the list, three – Eugene (14.7 percent) Newport/Lincoln City (18.7 percent) and Depoe Bay (18.7 percent) had larger increases than Sweet Home’s proposed 11.76 percent, which did not include the 4.20 percent automatic increase.
Lisa Gourley said that she thought 11.76 percent was “much higher than what it should be.”
“I think we’re paying at a higher rate than other people, then having only three others at higher rates, it’s excessive and I think we owe it to our constituents and to customers to question that.”
Gagner blamed the cost on “economy of scale,” noting that it costs more in fuel and time to travel farther between stops in rural areas than in cities.
He said that is why rates are high in Lincoln City and noted that of the four communities Sweet Home Sanitation serves – Sweet Home, Halsey, Brownsville and rural county areas.
White added that tipping fees – the cost of dumping garbage in a landfill – vary widely between communities.
“The biggest expense we have as a garbage company is disposal, followed by fuel and labor,” he said, adding that the percentage change in each community on the chart was a better indicator than the actual garbage rates.”
White said the 11.76 percent figure was “a true cost for us.”
“We have spent 11.6 percent more than we did last year,” he said. “That is to get us back to zero. It’s a good starting point.”
He emphasized that the city and Sweet Home Sanitation have “a strong partnership” and acknowledged that the sudden rate increase proposal “has frustrated folks.”
White echoed that.
“One reason why we pushed this off so long is because we didn’t want to have this conversation,” he said. “I know it’s a battle. What’s important for me and Scott, the relationship is what’s important.”
He said the company could work on finding ways to adjust rates “a percentage or two” and that one option could be changing the services it offers.
Councilor Dave Trask asked about what’s being done in southern Oregon where, the council heard during its June 12 meeting, customers have improved the percentage of contamination in commingled recycling.
“I don’t see anything of that in the packet,” he said.
Gagner said he didn’t yet have “hard facts” on that situation, and noted that the actual improvement was from 27 percent contamination to 20 on four items: corrugated cardboard, paper, Nos. 1 and 2 plastic bottles, and tin.
White noted that their next stop was going to be Brownsville, where City Manager Scott McDowell is interested in landfilling the community’s commingled recycling.
Councilors asked what the costs of that would be.
“If Brownsville and us decided to do a landfill, how much would that save?” Briana asked.
Gagner said it could be more like 5.2 percent rather than 11.6.
He and White said their company and others are looking into options, including building a facility to process recycling more locally.
Mayor Greg Mahler and Councilor James Goble suggested that the conversation needed to come to some sort of conclusion.
“We need to give these guys a point to go to,” Goble said.
“It’s not fair to these gentlemen to be beat up all night long,” Mahler added, saying he thought the company has served Sweet Home well.
Resident Dave Holley spoke up, saying he thought landfilling recycling should be a last resort.
“I think we still need to recycle whatever we can – adjust rates however we need to do it,” he said. “I don’t think we can afford to put everything in the landfill. A lot of this stuff has to be addressed grass-roots. We have to pay a little bit more and get rid what we can get rid of.
“China is mad at the U.S. over other issues. This is just one more thing.”
Briana asked about the possibility of less-frequent trash pick-up.
“Could you give us the cost of (collection) once every two weeks?”
Mahler conducted an informal survey of the council and all indicated that they would be willing to consider a rate increase of 8 or 9 percent.
Councilor Susan Coleman also asked about the possibility of surveying community residents to see what their preferences would be.
Gagner said that has been done in Washington and Idaho.
“That’s a great idea,” he said. “We want to do what’s best for the community.”